Payer of the Year: Anthem
Quick facts from 2017:
Revenue for the payer hit $90 billion, a 6% increase from 2016, while income reached $3.8 billion, a 56% increase from the year before. Membership totaled 40.2 million.
"Really what it comes down to is that the policy has a chilling effect on patients' decisions to seek care in the emergency department." - Laura Wooster, associate executive director of the American College of Emergency Physicians
It remains to be seen whether Anthem's bold policies will be adopted by more payers across the country and what will become of the legal challenges it faces regarding its recent moves.
As providers bulk up in scale to and gain leverage over payers, Anthem is making aggressive moves in a bid to push back.
A succession of controversial policy moves have spurred a backlash from doctors and lawmakers causing litigation and PR headaches for the Indianapolis-based payer, the nation's second-largest. At the same time, rivals are watching and some have taken tentative steps in that direction to limit the utilization of emergency rooms, the most expensive place for care.
Fed up with big and unexplainable price differences among providers and frustrated over what it sees as unnecessary emergency room visits, Anthem put in place a series of restraints on access to patients and physicians, including a controversial ER policy that can leave patients with the entire emergency room bill and a policy that attempts to shift patients away from outpatient imaging at hospital-owned facilities.
After noticing a spike in ER visits for what the company considers minor ailments, Anthem began warning members in certain states that they risked incurring responsibility for the entire bill if they went to the ER for an ailment such as the common cold.
The pushback was swift, causing backlash from a number of providers including the American College of Emergency Physicians who later went on to sue Anthem.
"Really what it comes down to is that the policy has a chilling effect on patients' decisions to seek care in the emergency department," Laura Wooster, associate executive director, American College of Emergency Physicians, told Healthcare Dive.
Anthem officials have said they were forced to make a tough decision in order to combat the increasing number of members who turned to the ER for issues that should be handled in urgent care or retail clinics — in other words, less expensive facilities.
Following its ER policy, Anthem also decided it would no longer allow its members to receive some outpatient imaging services at hospital-owned facilities. At the time, Anthem officials expressed concern over the cost difference between hospital-owned and independent facilities. The difference in price seemed to lack any meaningful explanation. The policy takes aim at major providers who sometimes encourage clinicians to refer patients to hospital-owned facilities.
Although many of Anthem's policies were enacted last year, Anthem has continued to face sharp reaction from providers and consumers.
And, Anthem's move has also influenced other payers, including UnitedHealthcare, the nation's largest insurer, which implemented a similar policy regarding the ER in an attempt to limit costs.
The decisions — while controversial — come at a time of dizzying mergers and acquisitions among providers, specifically in certain regions where providers are morphing into behemoths in terms of scale and reach, trying to address a number of headwinds including out-leveraging payers.
For example, Downers Grove, Illinois-based Advocate Health finalized its merger with Wisconsin-based Aurora this year, creating a health system so large that it spans from Chicago's northwest suburbs to northern Wisconsin and encompasses 27 hospitals, more than 8,100 affiliated physicians and 500 sites of care.
Another megamerger was announced in October, this time in Texas, bringing together Baylor Scott & White Health and Houston-based Memorial Hermann Health System. The Texas deal is likely to surpass the size and scope of the Advocate-Aurora deal that boasted its merger would create the 10th largest health system in the country.
Analysts at Deloitte predict that only half of the current health systems will exist in the next 10 years, forcing hospitals to examine their strategic direction. "Staying the course is no longer an option," according to a report from Deloitte.
That market power puts considerable pressure on payers, increasing the stakes over the fight for greater leverage.